Asus rumored to launch Xbox handheld in 2025 — OEM working with Microsoft to 'unify' Windows and Xbox libraries

Microsoft Gaming CEO Phil Spencer said late last year that an Xbox gaming handheld was years away. However, that doesn’t mean other OEMs are not working on building one with the approval of the Redmond software giant. According to The Verge’s sources, Microsoft is working to unify Xbox and Windows as a single platform, and Asus is one of its launch partners for this effort. As for the OEM, it’s working on Project Kennan — the codename for a gaming handheld that will likely benefit from Redmond’s efforts with the possibility of launching this year.

Aside from the hardware that Asus is building, Microsoft is also working on Project Bayside, a framework built to standardize the Xbox user interface across different devices. This will run the gaming handheld that Asus is building and is based on Windows but with an Xbox skin on top. Both Kennan and Bayside seem to be a part of Microsoft’s effort to integrate the best of Xbox and Windows.

Jason Ronal, the company’s VP of Xbox gaming devices and ecosystem, mentioned to The Verge earlier this year that the company is focusing on this integration and expects to see results later this year. However, while we hope these rumors are true, we still don’t have an official announcement (or maybe even just an official teaser) from either company.

Valve inspired a renaissance in handheld gaming consoles with the launch of the Steam Deck in 2022. However, Microsoft still currently has an advantage over it in terms of options, as most of the best PC gaming handhelds were and are powered by Windows 11. The tide may be changing with Lenovo announcement of the Legion Go S - Powered by SteamOS, though. You can get the Lenovo Legion Go S with Windows 11 today for $729, but the SteamOS-powered version, which will arrive in May, is expected to be much cheaper at just $499. The company said that it will launch a more affordable version of the Windows-powered Legion Go S around the same month for $599, but the $100 price difference might drive many gamers to the SteamOS version instead.

This development would have caught Microsoft’s attention, especially as one of its largest long-time OEM partners is introducing a rather popular OS substitute this May. It also shows that Valve is starting to face off with Windows with its SteamOS. Microsoft is already struggling to compete with the PlayStation 5 in the gaming console space, so it likely doesn’t want to let Valve and its SteamOS challenge it in handheld consoles. So, if it wants to ensure that it does not lose market share, it has to take steps to ensure that Xbox and Windows would remain the preferred operating system for handheld gaming.